During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

ECRI uses a highly nuanced “many-cycles” view to understand the complex dynamics of the global economy.

To monitor the U.S. economy alone, we use an array of more than a dozen specialized leading indexes in the context of the ECRI framework for incorporating various sectors and aspects of the economy.

The ECRI framework covers 21 economies, incorporating well over 100 proprietary indexes designed to be comparable across borders.

Global Event

Black Monday

Global Event

December 7th

U.S. Long Leading Index rules out imminent recession

Even with “more economists... saying that a recession either has recently begun or will do so within the next year”, our Long Leading Index correctly predicted continued growth, according to a story highlighted on the front page of The Wall Street Journal.

Global Event

Early 1990

Recession forecast

On February 6, 1990, Geoffrey H. Moore forecast a recession based on our leading indexes, which began that July. On March 9, 1990, The Wall Street Journal highlights that call: “Geoffrey Moore, who at 75 years of age has had a hand in declaring many modern recessions, noted the...[leading] employment index has begun signaling recession.”

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Global Event

August - October 1990

Iraq attacks Kuwait

In retrospect, recession is widely blamed on accompanying oil price spike. NBER recession probability model fails to forecast it. Fed Chairman Greenspan says in August, “those who argue that we are already in a recession I think are reasonably certain to be wrong,” and in October, “[t]he economy has not yet slipped into a recession.”

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Global Event

February 1991

“Recession's End”

Geoffrey H. Moore publicly calls the end of recession. That forecast was then featured in The New York Times. Recession ends in March, as officially recognized 21 months later by NBER.

Global Event

February 4, 1994

Fed announces surprise rate hike

Fed hikes rates the same day that we announce that our sharply rising leading inflation index “warns of higher U.S. inflation ahead.” Testifying to Congress, Fed Chairman Greenspan says “anything that Geoffrey Moore does I follow very closely, because he taught me Statistics 1 in college.” As our index keeps rising and the Fed keeps hiking rates the bond market suffers its worst year in history.

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Global Event

December 1994

Bankruptcy in CA

Following the rate hikes, Orange County goes bankrupt, having invested in a leveraged portfolio of mostly interest-sensitive securities — a strategy dependent on short-term interest rates staying low.

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Global Event

February 1995

Fed Chairman Greenspan describes preemptive policy

During Humphrey-Hawkins testimony on February 22, Fed Chairman Greenspan says, “[b]ecause the effects of monetary policy are felt only slowly and with a lag, policy will have a better chance of contributing to meeting the Nation's macroeconomic objectives if we look forward as we act... Thus, over the past year, we have firmed policy to head off inflation pressures not yet evident in the data. Similarly, there may come a time when we hold our policy stance unchanged, or even ease, despite adverse price data, should we see signs that underlying forces are acting ultimately to reduce inflation pressures.”

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Global Event

April - July 1995

Falling “inflation pressures”

On April 10, 1995, we announce: “Leading Inflation Index Decreases Again.” On July 6 the Fed changes direction and announces a rate cut, stating: “As a result of the monetary tightening initiated in early 1994, inflationary pressures have receded enough to accommodate a modest adjustment in monetary conditions.”

ECRI OUTLOOK

June 1999

ECRI predicts Japanese upturn — and warns of impact on U.S. growth

ECRI identifies the Japanese recovery as a critical shift in the factors underlying the long U.S. expansion, noting: “it is critical to monitor [ECRI's Japanese Long Leading Index] as well as the USFIG (ECRI's U.S. Future Inflation Gauge), which is likely to provide the earliest reliable reading of any sharp increase in inflationary pressures.”

ECRI OUTLOOK

September 2000

ECRI U.S. leading indicators closer to forecasting recession than any time in past decade

ECRI warns of recession ahead: “the U.S. Leading Diffusion Index (USLDI) plunged to its lowest level in the current expansion... in eight out of the ten instances since 1950 in which the USLDI dipped this low, a recession followed.”

Consensus View

U.S. recession is distant

“Sure, economic growth is slowing, but a recession? Forget about it, according to an index assembled by Economy.com, a forecasting firm.” — The Wall Street Journal, Sept. 2000

“Dozens of analysts, economists, industry CEOs, and technology buyers say a general tech-industry meltdown is highly unlikely.” — Business Week, October 2000

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Global Event

November 2000

Fed maintains “tightening bias”

FOMC statement still states: “the risks continue to be weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future.”

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Global Event

January 2001

Fed starts slashing rates

A month and a half after highlighting “inflation pressures” rather than “economic weakness” as the major risk in its official statement, the Fed starts cutting interest rates aggressively. But ECRI's leading indicators keep falling.

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CONSENSUS VIEW

February 2001

Latest U.S. economic readings are encouraging

“[T]he latest readings are encouraging... [T]he Fed's growth projection implies a significant pickup in the second half. ... [C]onsumers are not retrenching in a way that could push the economy into a recession.” - Business Week, Feb. 2001

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ECRI Outlook

March 2001

ECRI declares: “Recession No Longer Avoidable”

“The cyclical leading indicators monitored by ECRI are now collectively pointing to a business cycle recession in the U.S. economy.”

Global Event

March 2001

Recession officially begins... largely unrecognized at the time

“In a survey in March 2001, 95% of American economists said there would not be a recession. One of the few exceptions was the Economic Cycle Research Institute (ECRI), an independent research firm, which that same month correctly forecast, on the basis of its leading economic indicators, that a recession was unavoidable.” The Economist

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Global Event

September 2001

9/11 terrorist attacks

Following the attacks, many acknowledge the recession. But, in fact, the recession had begun six months earlier in March 2001, as officially determined in November 2001.

Consensus View

February 2005

“Slower Growth”

“We are forecasting slower growth in 2005 for three reasons. First, our model for forecasting GDP tells us that the 2004 increases in both oil and fed funds will slow growth in 2005. Second, the yield curve's significant flattening suggests slower growth. And third, on balance, the economy seems to be slowing, e.g., real GDP, employment and the svc PMI.” - Major Wall Street firm, Feb. 2005

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Global Event

August 2005

Hurricane Katrina hits U.S.

Several top economists now use the term “tipping point” to describe the state of the economy, in effect forecasting recession, as Fed rate hikes and “a massive oil shock” are followed by a major natural disaster.

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ECRI Outlook

September 2005

“A Shock-Resistant Economy”

“[T]he drivers of the U.S. business cycle are still configured in a way that makes it difficult for Katrina or other near-term shocks to trigger a new recession.”

ECRI Outlook

November - December 2007

Mounting Recession Risks

“The growing weakness in the growth rates of ECRI's leading indexes is a warning that recessionary weakness could develop. One key danger is a sustained credit crunch, because the credit crisis is clearly not over... [Our] Leading Index[es are] now approaching [their] worst reading[s] since the 2001 recession... Also, the breadth of deterioration evident in the latest data on the components of ECRI's many leading indexes has rarely been seen except near the cusp of a recession.”

Consensus View

December 2007

A U.S. recession is unlikely

“In its fourth quarterly report of 2007, the UCLA Anderson Forecast holds steadfast to the basic tenet of a forecast they have been making throughout the year, that the national economy is not technically in a recession, nor is there a national recession on the economic horizon.” - Business Wire, December 2007

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Global Event

December 2007

Recession officially begins

The start of the recession in December 2007 was officially recognized a year later.

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ECRI Outlook

January 2008

“Self-Reinforcing Downturn Has Already Begun”

“It is a fact that a self-reinforcing downturn has already begun. If allowed to continue, it will amount to the vicious cycle known as a business cycle recession.” - U.S. Cyclical Outlook, January 2008, Vol. XIII, No. 1

Consensus View

Bernanke Doesn't See Recession

ECRI Outlook

March 2008

“An Objective Approach Signals Recession”

“The U.S. economy is finally set on a recessionary course. This is because recessionary weakness long evident in ECRI's leading indexes for the financial services and construction sectors has now seeped into our leading index for non-financial services, a sector accounting for 62% of jobs. In fact, deterioration in the leading indicators of the U.S. economy has recently become very widespread. It is important to understand that this was not inevitable.” - U.S. Cyclical Outlook, March 2008, Vol. XIII, No. 3

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Consensus View

May 2008

Not in Recession

“The data are pretty clear that we are not in a recession… I would be very surprised if the NBER … would date this period as a recession.” - Edward Lazear, Chairman, White House Council of Economic Advisers

Consensus View

Declining Risk of Downturn

ECRI Outlook

August 2008

Pre-Lehman Forecast: “Worst Global Recession in Three Decades”

“It has been a long time since the global economy was faced with such concerted contractions... In fact, this may be the most concerted global recession since the oil shocks of the mid-1970s and early 1980s. Even worse, according to the long leading indexes, there is no light yet at the end of the tunnel... In sum, we are on the cusp of the worst global recession in nearly three decades, with no end in sight.”

ECRI Outlook

Secular Weakness to Undermine Recovery

“[T]he recovery, when it does arrive, is likely to be relatively modest.” – U.S. Cyclical Outlook, August 2008, Vol. XIII, No. 8

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Global Event

September 2008

Global financial crisis

Lehman Brothers fails, setting off a global financial crisis.

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ECRI Outlook

November 2008

“Leading Indexes Fall Off a Cliff”

“There has hardly ever been such a swift deterioration of an already downbeat economic outlook.” - U.S. Cyclical Outlook, November 2008, Vol. XIII, No. 11

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Global Event

November 2008

Fed announces $600 billion in MBS purchases

In November 2008, soon after Warren Buffett declared that he was buying stocks, the Fed publicly announced its plan to buy $600 billion in Mortgage-Backed Securities (MBS).

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Global Event

March 2009

Buffett: Economy “Has Fallen Off a Cliff”

During a CNBC interview Warren Buffett says that the economy “has fallen off a cliff.” A strikingly different tone than the one he struck a few months earlier in a New York Times op-ed titled, “Buy American. I Am,” concluding: “my money and my mouth both say equities.”

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ECRI Outlook

March 2009

U.S. Growth Rate Cycle Upturn Call

“[Such upticks in leading index growth] have always been followed by a growth rate cycle upturn” - U.S. Cyclical Outlook, March 2009, Vol. XIV, No. 3

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ECRI Outlook

April 2009

ECRI calls end of recession by summer 2009

“[T]he timing of the USLLI upturn, along with a nascent upturn in the WLI, suggests that the current recession will end in the second half of the year, probably by this summer...

[Yet, as] A. C. Pigou [wrote] in 1920, 'The error of optimism dies in the crisis but in dying it “gives birth to an error of pessimism. This new error is born, not an infant, but a giant.'”... Following the latest crisis, the 'giant error of pessimism' is now rampant. This is why today many are skeptical that we have the first clear signs that the recession will end in the coming months.”

No reason to think that the recession will end in spring/summer

ECRI Outlook

May 2009

V-Shaped Recovery? Only in First Year after Recession

“We have known for several decades that 'the strength of the recovery depends on the depth of the recession' (U.S. Cyclical Outlook, Vol. VII, No. 1, January 2002). Specifically, the more negative the low point in the growth rate of the U.S. Coincident Index (USCI), the stronger the bounce in the USCI tends to be in the first year of the recovery.” – U.S. Cyclical Outlook, May 2009, Vol. XIV, No. 5

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Global Event

June 2009

U.S. recession ends

The June 2009 recession end date is officially recognized in September 2010.

ECRI Outlook

Deceleration in U.S. Growth

ECRI Outlook

February 2010

ECRI issues public warning of slowdown

ECRI's U.S. “Long Leading Index... has a longer lead over the business cycle than equities, which are a short leading indicator, and in recent months its growth has been pulling back, pointing to slower growth in the economy starting ... by mid-year... [But] there's no double-dip imminent.”

Global Event

A Summer Revival?

ECRI Outlook

June 2010

Inflation Danger in Non-Japan Asia

“With inflation a growing concern, [Chinese] policy makers will be forced to take stronger action – even though a global slowdown is taking hold.” In any case, “[w]ith growth in ECRI's Chinese Leading Home Price Index remaining in a clear cyclical downturn, the pace of home price inflation is likely to moderate in the months ahead.”

Global Event

June - October 2010

Double-Dip Hysteria, Deflation Concerns

“[W]e can safely say that this barometer [from ECRI] is now signaling an 80% chance of a double-dip recession... Keep your eye on the -10 threshold, for at that level, the economy has gone into recession... only 100% of the time.” - David Rosenberg, June 2010

Pundits misconstrue ECRI's public data, ECRI rebuts misconceptions:

ECRI Outlook

July 2010

Global industrial growth to turn up by year-end

“[G]lobal industrial growth will [turn up]…, possibly around the end of 2010 or early 2011. [Thus,] a reacceleration in global industrial growth may well begin in a couple of quarters.” - International Cyclical Outlook, July 2010, Vol. XV, No. 7

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Global Event

August 2010

Bernanke announces QE2 at Jackson Hole

At the end of August 2010, Chairman Bernanke belatedly announced a second round of QE (QE2) at Jackson Hole.

ECRI Outlook

Clouds gather on horizon

ECRI Outlook

February 2011

Inflation Cycle Risks in China, India and Western Economies

“The recent rise in international inflation is being driven increasingly by more than food and energy. This is the message from a set of alternative future inflation gauges not only for the major Western economies, but also for India and China.

[The Chinese future inflation gauge] still suggests that Chinese inflation will stay in a cyclical upswing for the time being.”

ECRI Outlook

March 2011

Youth Unemployment to Surge

“The global recession's harshest legacy may be the staggering level of youth unemployment in most developed economies.

Yet, the real policy risk today is the potential for cyclical timing errors that could end up fostering boom-bust cycles, and therefore result in shorter expansions that doom millions of youth to a lifetime of frustration.”

Global Event

Good Job Growth Prospects?

ECRI Outlook

April/May 2011

U.S. slowdown ahead

“[O]ur U.S. leading indexes may be pointing to an approaching economic slowdown.” - U.S. Cyclical Outlook, April 2011, Vol. XVI, No. 4

“Quite simply, following a brief revival, U.S. economic growth is set to slow again... The downside risks to U.S. economic growth have risen decisively.” - U.S. Cyclical Outlook, May 2011, Vol. XVI, No. 5

ECRI Outlook

Chinese inflation to ebb

ECRI Outlook

September 2011

Silver Lining Within Threat of New Global Recession

“The only silver lining is that the long leading index of global industrial growth that enabled us to forecast the current global industrial slowdown far in advance, troughed in April 2011, and has now rebounded to a one-year high… [predicting] an upturn [in global industrial growth that] is at least one quarter away.” - International Cyclical Outlook, September 2011, Vol. XVI, No. 9

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ECRI Outlook

September 2011

Economy on Recession Track

“The jury is in, and the verdict is recession.” - U.S. Cyclical Outlook, September 2011, Vol. XVI, No. 9

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Global Event

September 2011

Recession Call; Operation Twist Announced on Same Day

The very same day that ECRI makes a recession call, the Fed announces Operation Twist, boosting inflation expectations but not real interest rates, which continued to languish in negative territory.

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ECRI Outlook

September 2011

Italy: Recessionary Outlook

“The Eurozone is increasingly vulnerable to shocks, with some economies already tipping into recession. A case in point is Italy, where the pronounced, pervasive and persistent decline in the Italian Long Leading Index makes it evident that recession is imminent.” - International Cyclical Outlook, September 2011, Vol. XVI, No. 9

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ECRI Outlook

December 2011

U.S. recession likely to begin by around mid-2012

“[T]he current alignment of ECRI's leading indexes of economic activity points to a recession starting as early as the current quarter, but more likely sometime between the first and third quarters of 2012. But even after the U.S. economy begins to contract, it is apt to take several more months before GDP growth numbers turn negative and the broader consensus acknowledges the reality of a recession.”

ECRI Outlook

December 2011

G7 Economies to See More Frequent Recessions

“Due to falling trend growth and higher volatility, shorter business cycle expansions may become the norm in most major developed economies.

Building on our 2008 work for the U.S.,… [ECRI's] analysis reveals a fairly pervasive pattern of long-term declines in the trend growth rates of GDP for most G7 economies… with higher cycle volatility,] [t]his … virtually dictates more frequent recessions in the G7 economies.”

ECRI Outlook

January 2012

Risk Asset Prices Can Keep Rising

“This does not mean that equity prices must soon tumble. After all, the world's major central banks are flooding the financial system with liquidity, and monetary easing is often greeted with bullish moves in risk assets.” - U.S. Cyclical Outlook, January 2012, Vol. XVII, No. 1

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ECRI Outlook

January 2012

Global Growth to Worsen

“The global economy is in a deepening downturn from which the U.S. cannot easily decouple.”

Wall Street Fantasizing About More QE

ECRI Outlook

March 2012

The Yo-Yo Years

“[W]hen an economy shows a pattern of slower and slower growth during economic expansions, along with a spike in cycle volatility, it becomes much easier for growth to drop below zero. … [T]his combination virtually dictates more frequent recessions. … In that case, the massive monetary easing being implemented by the major central banks as bridges to periods when growth is ‘normalized’ may turn out to be bridges to nowhere. … The … Bullwhip Effect … results in relatively small fluctuations in consumer demand growth being amplified up the supply chain into bigger swings in demand as we move away from the end consumer. Thus … global supply chains makes supplier economies – and, even more so, the suppliers to suppliers – highly vulnerable to the lash of the Bullwhip. … This adds up to what we might call the ‘yo-yo years’ for growth in both the developed and developing economies.” - International Cyclical Outlook, March 2012, Vol. XVII, No. 3

February 2016 (Yes, four years later): “This week, St. Louis Fed President James Bullard finally expressed his explicit agreement with the ‘yo-yo years’ thesis that ECRI laid out years ago (ICO, March 2012); namely, that the economy is ‘at a lower trend growth rate,’ implying ‘a higher probability of recession.’ Moreover, with regard to the Fed's options in the face of a sharper downturn, given the lower long-term trend, ‘monetary policy tricks are not going to do it.’ This is because ‘monetary policy is about stabilization … around a trend [which] is lower. [So] you gotta do other things to [boost] the trend.’ Obviously, this is true not only for the Fed, but also for other central banks, who have collectively added some 11 trillion dollars to their balance sheets since before the GFC.” - International Essentials, February 2016, Vol. XXI, No. 2

Rising Risks to Global Industrial Growth

ECRI Outlook

April 2012

Leading Home Price Index Points to Improved Home Price Growth Outlook

“[T]the current pattern exhibited by the growth rates of the USLHPI [U.S. Leading Home Price Index] and its components points to a cyclical upturn in home price growth. We arrive at this conclusion by examining the three P's to determine whether the upturns in the growth rates of the USLHPI and its components are as pronounced, pervasive and persistent as in past cyclical upturns in home price growth.” - U.S. Cyclical Outlook, April 2012, Vol. XVII, No. 4

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ECRI Outlook

June 2012

A Global Crisis of Youth Unemployment

“[T]he issue of rising global youth unemployment that we first featured 15 months ago is destined to become a bigger problem for major economies, not only in the coming months but also in the years ahead, with profound policy implications that few policymakers have seriously considered.” – International Cyclical Outlook, June 2012, Vol. XVII, No. 6

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Global Event

July 2012 - December 2012

Worst Non-Recession Ever

Revised data reveal that real GDP grew at just a ¼% annual rate in the second half of 2012 – the lowest pace of growth in any half-year ever recorded away from recession.

Global Event

August 2012

Bernanke's Jackson Hole speech lays groundwork for QEternity

[F]ollowing ECRI's observation in August 2012 that “the economy’s cyclical vulnerability continues to mount,” [real interest rates] kept sliding. On the other hand, inflation expectations, after a “spring swoon,” began to rise, jerking up at Mr. Bernanke's announcement of QEternity, but then drifting down, along with real interest rates.

ECRI Outlook

Global Industrial Growth to Fall Further

“The global industrial downturn is set to worsen in the near term. As yet, no light of revival is visible at the end of the tunnel.” – International Cyclical Outlook, September 2012, Vol. XVII, No. 9

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ECRI Outlook

October 2012

A Chinese Conundrum

“Chinese growth remains weak, and there are no clear signs yet that it will soon begin to recover. Under the circumstances, there may be a desire for further stimulus, but ECRI's leading indexes are suggesting that this will need to be limited to avoid resurgent consumer price inflation and a fresh upturn in home price inflation.” – International Cyclical Outlook, October 2012, Vol. XVII, No. 10

ECRI Outlook

Growth Outlook Worsens for Most Economies

“In the face of deteriorating growth prospects, major central banks are still pushing on a string — only harder.” – International Cyclical Outlook, December 2012, Vol. XVII, No. 12

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ECRI Outlook

April 2013

Japan Shifts to Expansion Track

“As Japan exits its third recession in five years, deflationary pressures are retreating further, having begun to ebb before Abenomics appeared on the horizon.” – International Cyclical Outlook, April 2013, Vol. XVIII, No. 4

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ECRI Outlook

June 2013

Chinese Outlook Deteriorates Further

“Chinese growth prospects, which had already been fading, have waned further, with Chinese Long Leading Index growth still falling. So, looking just at China's cooling growth and inflation prospects, it might be reasonable to think that the economy is in need of some stimulus.” – International Cyclical Outlook, June 2013, Vol. XVIII, No. 6

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ECRI Outlook

July 2013

Spanish Recession to End

“Prospects are brightening further in parts of Europe, including Spain, where a five-year recession is on its way out.” – International Cyclical Outlook, July 2013, Vol. XVIII, No. 7

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ECRI Outlook

September 2013

U.K. Recovery Takes Hold

“Last November we correctly called the U.K.'s exit from its second recession in five years, despite lingering concerns amongst the consensus of a 'triple-dip' recession. Since then, stronger upturns in the growth rates of ECRI's leading indexes and a fresh upturn in the coincident index's growth rate have vindicated that call, indicating that a cyclical expansion has taken hold.” – International Cyclical Outlook, September 2013, Vol. Volume XVIII, No. 9

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ECRI Outlook

October 2013

Japanese Slowdown Taking Hold

“Months after exiting its sixth recession in two decades, Japan is entering a fresh downturn in growth.” – International Cyclical Outlook, October 2013, Vol. XVIII, No. 10

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ECRI Outlook

December 2013

Advanced Economies Stay in Liquidity Traps

“Inflation is likely to keep trending downward in both the Eurozone and the U.S.” – International Cyclical Outlook, December 2013, Vol. XVIII, No. 12

Global Event

January 2014

Davos Euphoria

“Capturing the giddiness among the great and the good in Davos, Kenneth Rogoff observed last week, ‘People are euphoric here, they think everything is going to be fantastic.’ That might be the view of the movers and shakers gathered on a mountaintop to discuss economic inequality – effectively the main topic on the agenda – but it is not a perspective we share.” – International Cyclical Outlook, January 2014, Vol. XIX, No. 1

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ECRI Outlook

January 2014

Failure to Launch

“For the fifth straight year, expectations are running high that this time around the U.S. economy will take off and reach ‘escape velocity.’” – U.S. Cyclical Outlook, January 2014, Vol. XIX, No. 1

Dimming G7 Growth Outlook Belies Buoyant Consensus

ECRI Outlook

March 2014

Russian Recession

“With ECRI's leading indicators showing the Russian economy in a precarious position as early as last fall, Russia may have started sliding into recession before the Crimean crisis began.” – International Cyclical Outlook, March 2014, Vol. XIX, No. 3

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ECRI Outlook

April 2014

Documenting the Yo-Yo Years

“Our prediction of more frequent recessions in developed economies has come to pass, with most major economies experiencing additional recessionary downswings since the Global Financial Crisis.” – International Cyclical Outlook, April 2014, Vol. XIX, No. 4

Gold Faces Downward Cyclical Pressure

ECRI Outlook

July 2014

Early Signs of Global Growth Slowdown

“[T]he long leading index growth rates for some of the most important economies – ranging from China to the U.S., Japan and Germany – are now exhibiting greater weakness. In this context, a handoff from policy stimulus to self-sustaining expansions is likely to prove troublesome, as we predicted at the beginning of this year.” – International Cyclical Outlook, April 2014, Vol. XIX, No. 7

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ECRI Outlook

August 2014

Abenomics Failing

“[O]ur array of Japanese indicators sees ‘the mounting danger of a fresh recession – Japan's seventh since 1992.’ In fact, both the JALLI and the JACI are in three P's downturns, confirming that Japan is proceeding along the recession track, uncannily close to the pattern seen in 1997.” – International Cyclical Outlook, August 2014, Vol. XIX, No. 8

Structural Frailty Crimps Cyclical Upswing

ECRI Outlook

November 2014

U.S. Manufacturing Growth Slowdown

“The downturn in U.S. growth is being driven by a manufacturing slowdown, while non-manufacturing growth holds up for the time being.” – U.S. Cyclical Outlook Essentials, November 2014, Vol. XIX, No. 11

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ECRI Outlook

December 2014

U.K. Economy Facing Broad Slowdown

“While the consensus remains fairly optimistic about the U.K. economy, ECRI's leading indexes are signaling a pervasive slowdown in economic growth in the months ahead.” - International Cyclical Outlook Focus, December 2014, Vol. XIX, No. 12

ECRI Outlook

April 2015

Brazilian Carnival: the Music Stops

“[T]he current cyclical outlook remains gloomy, with exports the only glimmer of hope. Therefore, recessionary conditions are likely to persist in the near future.” – International Cyclical Outlook Focus, April 2015, Vol. XX, No. 4

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ECRI Outlook

June 2015

Recoveries Remain Resilient

In the context of Grexit, “[c]oncerns about a looming economic catastrophe are increasingly being voiced by a veritable who’s who of luminaries. Indeed, growing ranks of the great and the good are worried that the global economy, like Humpty Dumpty, is about to have a great fall, never to be put together again. We understand their apprehension, given our concern since the summer of 2008 about collapsing trend growth. However, in terms of our current assessment of global recession risk, we are not ready to join in.” - International Cyclical Outlook Essentials, June 2015, Vol. XX, No. 6

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ECRI Outlook

July 2015

One-Speed Economy

“The two-speed economy – where manufacturing is in a growth rate cycle (GRC) downturn and services in a GRC upturn – that we flagged in November has come to an inauspicious end. With nonfinancial services growth in a three P's downturn and growth in the leading and coincident services indexes weakening, the service sector has entered a slowdown, joining manufacturing. This will likely result in an intensification of the ongoing U.S. GRC downturn in the coming months, as we noted recently.” - U.S. Cyclical Outlook Focus, July 2015, Vol. XX, No. 7

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ECRI Outlook

July 2015

Collision Course

“The Fed’s rate hike plans are on a collision course with the economic cycle. According to Fed Chairman Janet Yellen’s congressional testimony last week, ‘economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target,’ i.e., if not by September, then by December. But while the Fed clearly expects a pickup in growth, ECRI's leading indexes suggest the opposite.” - U.S. Cyclical Outlook Essentials, July 2015, Vol. XX, No. 7

ECRI Outlook

January 2016

Recession Not at Hand

“Although some economists continue to expect a pickup in U.S. growth… with USLLI growth sliding to a 23-month low, there is no end in sight for this GRC downturn. In other words, the slowdown is set to intensify for the foreseeable future, i.e., through the first half of 2016. As to whether this deepening slowdown will culminate in a recession, the jury is still out. Whereas a recession signal requires the level of the USLLI to be in a pronounced, pervasive and persistent downturn, the magnitude of its decline from its August high has so far been modest.” - U.S. Essentials, January 2016, Vol. XXI, No. 1

ECRI Outlook

July 2016

Inflation Pressures Ratchet Up

“In sharp contrast to the decline in longer-term inflation expectations, ‘stagflation lite’ — a cyclical upturn in inflation during a cyclical slowdown, which we had predicted earlier — is already a reality. Looking ahead, with the U.S. Future Inflation Gauge (USFIG) in a decisive upturn that is increasingly pronounced, pervasive and persistent, inflation is poised to mount further in the coming months.” - U.S. Essentials, July 2016, Vol. XXI, No. 7

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ECRI Outlook

August 2016

Recession Risk Retreats

“The U.S. economy has veered away from a recession track, and may finally be on the cusp of a growth rate cycle upturn. If so, the ‘stagflation lite’ we had flagged earlier this year should give way to an inflationary upswing in economic growth.” - U.S. Essentials, August 2016, Vol. XXI, No. 8

ECRI Outlook

December 2016

U.S. Growth Rate Cycle Upturn at Hand

“Building on the gradual improvement that has been evident in recent months, the latest forward-looking data finally provides clear evidence that a growth rate cycle upturn is now at hand.” - U.S. Essentials, December 2016, Vol. XXI, No. 12